Le Tung, Sunhouse’s Strategy Director, said businesses can leverage the value chains they have created to serve consumers. However, when they go international, the requirements are much higher. Businesses then need to build competitive value chains spanning R&D, manufacturing, supply chains, branding and distribution.

If businesses focus solely on manufacturing, they will retain a relatively small share of the value because profit margins are thin. To move up the value chain, they must gradually become more deeply involved in activities that generate higher value added.

He said Sunhouse is taking an approach that combines multiple links in the value chain. In Vietnam, the company aims to control more stages, from raw materials and manufacturing to supply and distribution. When expanding overseas, it takes a more flexible approach, developing its brand in neighboring markets and the US while continuing to provide OEM (original equipment manufacturing) services to international corporations and upgrading its R&D capabilities.

Five years ago, the cost of manufacturing a product for US partners was about $50, but it has now fallen to around $25. According to Tung, entering international markets with stringent requirements puts pressure on businesses to improve, increasing manufacturing efficiency and productivity.

Innovation must create market value

Le Tung said one of the key requirements for improving competitiveness is innovation. However, innovation is not simply about how many R&D departments a company has or how many technologies it owns. The key is how businesses can apply technology, data and research results to create products and services that the market will accept.

As the technology gap between Vietnam and developed countries remains significant, trying to compete solely by using the most advanced technologies is not always feasible. More important is making use of available technologies and data to make decisions and adapt more quickly to changes in the market.

Nguyen Quoc Thinh, a senior lecturer at Thuongmai University, said businesses need to view innovation from at least four perspectives: products, processes, organization and tools, with particular attention to digital tools. These four elements are interconnected, and if implemented in a coordinated manner, they can help create “soft power” for businesses.

Three pillars of soft power

A good product alone is not enough to build a strong brand. Customer trust is also shaped by how a business delivers its products, its ability to respond flexibly, its communication with customers and its fulfillment of commitments.

According to Thinh, branding, innovation and culture are three important pillars for building soft power for businesses, organizations and, more broadly, a country.

Culture is the foundation. Corporate culture is not limited to internal rules or stated values. More importantly, it creates a humane environment, encourages creativity and preserves those values across generations of employees.

“Most importantly, the ultimate goal of building a culture within a business, a locality and even a country is to create a humane working environment and, in particular, stimulate creativity,” Thinh said.

In 2003, the Prime Minister approved the Vietnam National Brand Program with the goal of building Vietnam’s image. Under the program, the 2026-2030 period will focus on laying the foundation and bringing about fundamental transformation, including completing the national brand criteria system, accelerating digitalization and promoting trade on global platforms. 

The 2030-2035 period aims to develop a group of businesses with strong brands at the regional and international levels.

It is expected that by 2035 Vietnam will have 5-10 Vietnamese business brands ranked among the world’s Top 500, while bringing the value of Vietnam’s national brand into the global Top 25.

According to Thinh, in the initial stage, Vietnam chose an easier approach by building its national brand around product brands, with plans to reposition Vietnam about 10 years later. “But unfortunately, we are now in the 23rd year, and only now are we discussing how to reshape it,” he said.

A national brand is not simply a list of representative business brands from a country. It also reflects the image of that country in the eyes of the world. A major question is: How does the world view Vietnam, and how does Vietnam want to be perceived?

Thinh said the answer cannot come solely from communication campaigns. Products with distinctive identities, if enhanced in design, quality, storytelling and market approach, can become part of Vietnam’s brand, helping businesses retain more value within global value chains.

Ngoc Ha